STOCK OPTION AGREEMENT
(Nonstatutory Stock Option)
THIS AGREEMENT made as of _________________ between The Xxxxxx
Electronics, Inc., a New York corporation (hereinafter called the "Company"),
and ____________(hereinafter called the "Optionee"), an employee of the Company.
W I T N E S S E T H:
WHEREAS, the 1998 Stock Option Plan (hereinafter called the "Plan") was
approved by the stockholders of the Company at the adjourned 1988 Annual Meeting
of Shareholders of the Company; and
WHEREAS, the Plan is administered by the Stock Option and Compensation
Committee of the Board of Directors (the "Committee");
WHEREAS, the Committee has determined that the Optionee is eligible to receive a
grant of an option under the Plan and that the Optionee shall be granted the
option hereinafter set forth upon the terms and conditions hereinafter
contained; and
WHEREAS, THE Fair Market Value (as defined in the Plan) on the date of
grant of this option of each share of the Company's common stock, par value
$0.01 per share, is _________.
NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the Company and the Optionee hereby agree as follows:
1. The Company hereby grants to the Optionee the option (the "Option")
to purchase all or part of an aggregate of __________ shares of Common Stock at
a purchase price of $____ per share, subject to the terms and conditions of this
Agreement and the Plan, the terms of which are incorporated herein by reference.
The Option is not intended to qualify as an incentive stock option under Section
422A of the Internal Revenue Code of 1986, as amended. The Option shall
terminate entirely at the close of business on ___________. Subject to the
foregoing, the Option may be exercised as to not more than ___________ percent
of the shares covered thereby on or after __________; as to not more than
________ percent of such shares on or after _________; and as to all such shares
on or after ___________ and until the expiration of the Option, less in each
case the number of shares previously purchased hereunder.
2. The Option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution, and is exercisable, during the
lifetime of the Optionee, only by the Optionee or by his/her guardian or legal
representative.
3. Except as set forth in this paragraph 3 and in paragraph 4, the Option may
not be exercised unless the Optionee is then in the employ of the Company or a
division or subsidiary thereof, and unless the Optionee has remained
continuously so employed since the date of grant of this Option. In the event
that the employment of the Optionee shall terminate (other than by
reason of death, disability or retirement), all Options of such Optionee that
are exercisable at the time of such termination; provided, however, that if the
employment of the Optionee shall terminate for cause, all Options theretofore
granted to the Optionee shall, to the extent not theretofore exercised,
terminate forthwith.
4. If the Optionee shall die while employed by the Company or a
subsidiary thereof, or within (3) months after the termination of the Optionee's
employment other than for cause, or if the Optionee's employment shall terminate
by reason of Disability (as defined in the Plan) or retirement, all Options
theretofore granted to the Optionee (to the extent otherwise exercisable) may,
unless earlier terminated in accordance with their terms, be exercised by the
Optionee or by the Optionee's estate or by a person who acquired the right to
exercise such Option by bequest or inheritance or otherwise by reason of the
death or Disability of the Optionee, at any time within one year after the date
of death, Disability or retirement of the Optionee.
5. The Option may be exercisable only by written notice to the
Secretary of the Company as provided in paragraph 10 hereof. Such notice, which
shall be substantially in the form of Exhibit A hereto, shall state the election
to exercise the Option, the manner of payment of the option price and the number
of shares in respect of which it is being exercised and shall be signed by the
Optionee. The certificate or certificates of the shares as to which the Option
shall have been exercised will be registered only in the name of the person
exercising the Option. In the event the Option becomes exercisable by another
person or persons upon death of the Optionee, the notice of exercise shall be
accompanied by appropriate proof of the right to exercise the Option. The Option
may not be exercised at any one time as to fewer than 100 shares of Common Stock
(or such number of shares as to which the Option is then exercisable if such
number is less than 100).
6. At the time of exercise of the Option and prior to the delivery of such
shares, the Optionee shall pay in cash to the Company the aggregate option price
of all shares purchased pursuant to an exercise of the Option. All payments
shall be made by check payable to the order of the Company. In lieu of making
payment in cash for the aggregate option price of shares purchased pursuant to
the exercise of the Option, the Optionee may make such payment (i) by delivery
to the Company of Common Stock owned by the Optionee having a Fair Market Value
(as defined in the Plan) at least equal to the aggregate option price or (ii)
partly in cash and partly by delivery of Common Stock. If the Fair Market Value
of Common so delivered exceeds the aggregate option price (or part thereof), the
Company will pay to the Optionee in cash an amount equal to the Fair Market
Value of the fractional portion of any share of Common Stock so delivered and
not applied by the Company in payment of the option price and a certificate for
any whole shares of Common Stock not required to be applied by the Company in
payment of the option price. In addition, the Option Price may be effected in
whole or in part with monies borrowed from the Company pursuant to repayment
terms and conditions as shall be determined from time to time by the Committee,
in its discretion, separately with respect to each exercise of Options and each
Optionee; provided, however, that each such method and time for payment and each
such borrowing and terms and conditions or repayment shall be permitted by and
be in compliance with applicable law, and provided, further, in the event the
option price is paid with monies borrowed from the Company, such fact shall be
noted conspicuously on the certificate for shares in accordance with applicable
law. The Optionee shall not have any of the rights of a
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stockholder of the Company with respect to the shares delivered upon any
exercise of the Option unless and until certificates representing such shares
shall have been delivered to the Optionee.
7. The Optionee agrees that any resale of the shares received upon any
exercise of the Option shall be made in compliance with the registration
requirements of the Securities Act of 1933 as amended or an applicable exemption
therefrom and to promptly provide the Company with such representations,
certificates and other assurances of compliance with such registration
requirements as the Company shall from time to time reasonably request. If the
Optionee is an "affiliate" of the Company within the meaning of Rule 144 under
such Act, the Optionee agrees that any resale of the shares received upon any
exercise of the Option shall be made in compliance with the registration
requirements of such Act or an applicable exemption therefrom, including without
limitation the exemption provided by Rule 144.
8. The provisions of Section 8(i) of the Plan are hereby incorporated
by reference and in the event of certain changes set forth in Section 8(i) of
the Plan, the Committee shall make the appropriate adjustments to the Options
consistent with the terms of such Section 8(i).
9. The Committee shall have final authority to interpret and construe
the Plan and this Agreement and to make any and all determinations under them,
and its decision shall be binding and conclusive upon the Optionee and/her legal
representative in respect of any questions arising under the Plan or this
Agreement.
10. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 and
any notice to be given to the Optionee shall be addressed to him at his
residence as it may appear on the records of the Company or at such other
address as either party may hereafter designate in writing to the other.
11. The Agreement shall be binding upon and inure to the benefit of the
parties hereto and any successors to the business of the Company, but this
Agreement shall not be assignable by the Optionee.
12. The Company and Optionee agree that the Company shall, to the
extent permitted or required bylaw, have the right to deduct federal, state and
local taxes of any kind required by law to be withheld upon the exercise of this
Option from any payment of any kind otherwise due to the Optionee.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date and year first above written.
XXXXXX ELECTRONICS, INC.
BY
NAME:
TITLE:
XXXXXX ELECTRONICS, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT is made and entered into as of the _____
day of ________, 199_, by and between Xxxxxx Electronics, Inc., a New York
corporation (the "Corporation") and ___________ (the "Optionee").
WHEREAS, the Optionee is a valued employee, director or consultant of
the Corporation; and
WHEREAS, the Corporation considers it desirable and in its best
interests that Optionee be given an opportunity to acquire a proprietary option
to purchase shares of Common Stock of the Corporation, par value $.01 per share
(the "Common Shares"), in accordance with the provisions of the Corporation's
Stock Option Plan (the "Plan").
NOW, THEREFORE, for good and valuable consideration paid by the
Optionee to the Corporation, the adequacy of which is hereby acknowledged, and
the mutual covenants hereinafter set forth, the parties agree as follows:
1. Grant of Option. The Corporation hereby grants to the Optionee the
right and option (hereinafter the "Incentive Option") to purchase all or any
part of an aggregate of ___________ (___) Common Shares (subject to adjustment
as provided in Paragraph 6 hereof), on the terms and conditions set forth and in
the Plan, which is incorporated herein by reference. The Optionee acknowledges
receipt of a copy of the Plan.
2. Purchase Price. The purchase price of the Common Shares covered by
the Incentive Option shall be $______ per share (subject to adjustment as
provided in Paragraph 6 hereof).
3. Term of the Option. The Incentive Option shall be exercisable as to
___ shares commencing one year from the date hereof, an additional ___ shares
commencing two years from the date hereof and an additional ___ shares
commencing three years from the date hereof. The Incentive Option granted hereby
shall expire at the __________ anniversary of the date hereof, unless earlier
terminated as hereinafter set forth.
4. Method of Exercising Option. The Optionee may exercise the Incentive
Option in whole or in part (to the extent that it is exercisable in accordance
with its terms) by giving written notice to the Corporation, specifying therein
the number of Common Shares which he then elects to purchase, together with the
tender of the full purchase price of the Common Shares covered by the Incentive
Option (in cash or certified check payable to the order of the Corporation or by
delivery of shares of the Corporation's Common Stock).
As soon as practicable after receipt by the Corporation of such notice
and of payment in full of the Incentive Option price of all the Common Shares
with respect to which the Incentive Option has been exercised, a certificate or
certificates representing such Common Shares shall be issued in the name of the
Optionee and shall be delivered to the Optionee. All Common Shares shall be
issued only upon receipt by the Corporation of the Optionee's representation
that the shares are purchased for investment and not with a view toward
distribution thereof.
5. Availability of Shares. The Corporation, during the term of this
Incentive Option, at all times shall keep available the number of shares of
common stock required to satisfy the Incentive Option.
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The Corporation shall utilize its best efforts to comply with the
requirements of each regulatory commission or agency having jurisdiction in
order to issue and sell the Common Shares to satisfy the Incentive Option;
provided, however, that the Corporation shall not be required to register the
Common Shares issuable on exercise of the Incentive Option under the Securities
Act of 1933, as amended. Such compliance will be a condition precedent to the
right to exercise the Incentive Option. The inability of the Corporation to
effect such compliance with any such regulatory commission or agency which
counsel for the Corporation deems necessary for the lawful issuance and sale of
the Common Shares to satisfy this Incentive Option shall relieve the Corporation
from any liability for failure to issue and sell the Common Shares to satisfy
the Incentive Option for such period of time as such compliance is not
effectuated.
6. Adjustments. If prior to the exercise of any option granted
hereunder the Corporation shall have effected one or more stock split-ups, stock
dividends, or other increases or reductions of the number of shares of its
common stock outstanding without receiving compensation therefor in money,
services or property, the number of Common Shares subject to the option hereby
granted shall (a) if a net increase shall have been effected in the number of
outstanding shares of the Corporation's Common Shares, be proportionately
increased and the cash consideration payable per Common Share shall be
proportionately reduced; and (b) if a net reduction shall have been effected in
the number of outstanding shares of the Corporation's Common Shares, be
proportionately reduced and the cash consideration payable per Common Share be
proportionately increased.
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7. Restrictions. The holder of this Incentive Option, by acceptance
hereof, represents and warrants as follows:
(a) This Incentive Option and the right to purchase common
stock hereunder is personal to the holder and shall not be transferred to any
other person, other than by will or the laws of descent and distribution.
(b) The holder hereof has been advised and understands that
the Incentive Option has been issued in reliance upon exemptions from
registration under the Securities Act and applicable state statutes; the
Incentive Option and the Common Shares issuable upon exercise of the Incentive
Option have not been registered under the Securities Act or applicable state
statutes and must be held and may not be sold, transferred, or otherwise
disposed of for value unless they are subsequently registered under the
Securities Act or an exemption from such registration is available; except as
set forth herein, the Corporation is under no obligation to register the
Incentive Option or the Common Shares underlying such Incentive Option under the
Securities Act or applicable state statutes; in the absence of such
registration, the sale of the Incentive Option or the Common Shares may be
practicably impossible; the Corporation's registrar and transfer agent will
maintain stop-transfer instructions against registration or transfer of the
Incentive Option and the Common Shares and any certificate issued upon exercise
of the Incentive Option representing the Common Shares will bear on its face a
legend in substantially the following form restricting the sale of the Common
Shares:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE
ABSENCE OF EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
(c) Within the two-year period immediately following the date
the Incentive Option has been exercised and the Common Shares fully paid for,
the Corporation may refuse to transfer the Common Shares unless the holder
thereof provides an opinion of legal counsel reasonably satisfactory to the
Corporation or a "no action" letter or interpretive response from the staff of
the Securities and Exchange Commission to the effect that the transfer is
proper; further, unless such opinion letter or response states that the Common
Shares are free of any restrictions under the Securities Act, the Corporation
may refuse to transfer the Common Shares to any transferee who does not furnish
in writing to the Corporation the same representations and agree to the same
conditions with respect to such Common Shares as are set forth herein.
Notwithstanding any of the foregoing, the Corporation may refuse to transfer the
Common Shares if any circumstances are present reasonably indicating that the
transferee's representations are not accurate.
(d) After two years but prior to the third anniversary from
the date the incentive Option has been exercised and the Common Shares fully
paid for, the Corporation may refuse to transfer the Common Shares unless the
holder either (i) meets the requirements of Subparagraph (b) above; or (ii)
sells such Common Shares in accordance with Rule 144 and
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furnishes to the Corporation written assurances of compliance therewith in the
form of a copy of the Notice of Form 144 and appropriate letters of compliance
from the holder of such Common Shares and the securities broker-dealer to or
through which such Common Shares are being sold. No opinion of counsel for the
holder of the Common Shares shall be required respecting sales in reliance on
Rule 144 pursuant to Clause (ii) of this Subparagraph (d).
(e) After three years from the date of the Incentive Option
has been exercised and the Common Shares fully paid for, the Corporation shall,
upon the written request of any persons who have held the Common Shares for
three years (excluding any tolling period provided for by Rule 144) and who is
not, and has not been during the preceding three months, an affiliate of the
Corporation, re-issue to such holder in such names and denominations as the
holder shall request, one or more certificates for the Common Shares without any
restriction whatsoever on their further transfer and cancel any and all stop
transfer instructions regarding such Common Shares on the books and records of
the Corporation.
8. Shareholder's Rights. This Incentive Option is non-transferable by
the Optionee, except in the event of the Optionee's death as provided in
Paragraph 9(a) hereof and during the Optionee's lifetime is exercisable only by
the Optionee. On any attempt to transfer or otherwise dispose of this Incentive
Option other than pursuant to the terms hereof or the terms of the Plan, this
Incentive Option shall immediately become null and void. The Optionee shall have
no rights as a shareholder with respect to Common Shares underlying Incentive
Option until payment of the Incentive Option price and delivery to the Optionee
of the Common Shares as provided herein.
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9. Termination of Option. Except as otherwise stated herein, the
Incentive Option to the extent not heretofore exercised shall terminate upon the
first of the following dates to occur:
(a) In the event of the Optionee's death, the Optionee's
executors or administrators may exercise, within twelve (12) months following
the date of the Optionee's death, the Incentive Option as to all or part of such
number of shares which the Optionee was entitled to purchase at the time of his
death, as determined in accordance with Paragraph 3 hereof, not theretofore
exercised during the Optionee's lifetime.
(b) On the date of the termination of the Optionee's
employment for cause or on the date the Optionee voluntarily quits his
employment.
(c) The expiration of three months after the date on which the
Optionee's employment by the Corporation is terminated not for cause (except if
such termination be by reason of death or permanent and total disability).
(d) The expiration of twelve (12) months after the date on
which the Optionee's employment by the Corporation is terminated, if such
termination occurs by reason of the Optionee's permanent and total disability.
(e) ____________, the _____ anniversary of this Agreement.
10. Validity and Construction. The validity and construction of this
Incentive Option shall be governed by the laws of the State of New York. Such
construction is vested in the board and its construction shall be final and
conclusive.
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IN WITNESS WHEREOF, the Corporation has caused this Option
Agreement to be executed by its proper corporate officers thereunto duly
authorized.
XXXXXX ELECTRONICS, INC.
By:
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Xxxx Xxxxx, Chairman
---------------------------------
Optionee
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